Alaska LNG Projects Gain Momentum Amid Middle East Disruptions

The ongoing tensions between the United States and Iran have disrupted Middle East gas supplies, drawing renewed attention to Alaska's potential as a major liquefied natural gas (LNG) export hub.

The state-owned Alaska Gasline Development Corp. is pursuing the $54.5 billion Alaska LNG project, which would transport gas from the North Slope to Nikiski in the south via a 1,190-kilometer pipeline and build a liquefaction facility with an annual capacity of 20 million tons.

Glenfarne Group acquired the project last year after ExxonMobil, BP, and ConocoPhillips withdrew in 2016 due to cost concerns. Analyst Alex Munton notes that pipeline construction alone would require about $17 billion and is a major obstacle for the project.

A related tax-incentive bill failed to pass the Alaska state legislature last month, delaying the first phase of pipeline construction. Glenfarne also needs long-term purchase agreements for 3 million tons of LNG per year before making a final investment decision on the liquefaction facility.